Following a consultation seeking ways to prevent the abuse of zero hours contracts whilst also maximising opportunities both for employers seeking to create jobs and for individuals to obtain work that suits them, the Government has announced that it will ban the inclusion in such contracts of exclusivity clauses that prevent a person working for another employer even where no work is guaranteed under the contract.
The measure is contained in the Small Business, Enterprise and Employment Bill, which was introduced to Parliament on 25 June 2014.
In addition, the Government plans to:
- consult further on how to prevent rogue employers evading the exclusivity ban, for example through offering 1 hour fixed contracts;
- work with business representatives and unions to develop a code of practice on the fair use of zero hours contracts by the end of the year (2014); and
- work with stakeholders to review existing guidance and improve information available to employees and employers on using these contracts.
This will come as a blow to some employers who historically have used exclusivity clauses to prevent staff working for competitors and will make it all the more important to require workers to sign up to contracts containing clauses preventing the disclosure of confidential information. We suspect that because of this change, going forward, zero hours contracts will only be used for unskilled roles where there is minimal exposure for a company.